If you are involved in a lawsuit, the thought of going to trial may be intimidating. Many people have never been in a courtroom, so they envision a large, formal room with wooden trim, an overbearing judge in a long, black robe, and a jury that appears condemning. Most lawsuits, however, never go to trial. Instead, they are settled through “alternative dispute resolution,” known as ADR, for short. ADR just means that different methods are used to resolve legal disputes, rather than a traditional trial. The most common forms of ADR are mediation and arbitration.
Mediation: A Discussion About Common Goals
Perhaps the most common form of alternative dispute resolution is mediation. In mediation, the people involved in the lawsuit, known as “parties,” choose an independent person, known as a “mediator,” to help explore solutions to their dispute. The mediator’s job is to help the parties see the strengths and weaknesses of their respective positions and to help them find common ground.
Before the mediation, the parties (or their lawyers) usually give the mediator copies of important documents, as well as summaries of how they see the case. This allows the mediator to prepare for the mediation by understanding what happened, as well as each party’s legal position.
On the day of the mediation, the parties and the mediator meet in a common location, often the office of the mediator or one of the lawyers. Most mediators begin by giving everyone an overview of how the mediation will work. Some even ask the parties to talk to each other before they begin, just to introduce themselves and perhaps explain the basics of their positions.
However, at some point, it is likely that the parties will be placed in different rooms.
After the parties are separated, the mediator visits each room. This gives the parties an opportunity to explain how they view the case in more detail. It also gives the mediator the chance to ask questions and to point out weaknesses in their cases. The hope is that the mediator can help the parties see their cases more realistically. Sometimes, the mediator may go back and forth between the parties several times, and usually, at some point, settlement amounts will become part of the discussion.
The great thing about mediation is that it is nonbinding; in other words, the parties get to decide whether to settle. Although they may feel pressured to do so to avoid the cost and worry of going to trial, the mediator cannot make them.
Arbitration: A Miniature Trial
Arbitration is more formal than a mediation but less formal than a trial. Arbitration is typically used because it is required by a contract between the parties, such as an employment agreement, a rental agreement, or even a credit card agreement. The arbitration clauses in these agreements usually require that binding arbitration. With binding arbitration, the parties are typically stuck with whatever the arbitrator decides. In fact, the binding nature of most arbitrations is what sets them apart from mediation.
Arbitration is a lot like a miniature trial. The parties may select the arbitrator, or an agreement between them may spell out how an arbitrator is to be selected. For example, many collective bargaining agreements, which set forth how labor unions and employers will work together, may name a certain organization of arbitrators to be used or describe how an arbitrator will be selected.
At an arbitration, the parties can put on evidence, much like a formal trial. They can call witnesses to testify and submit documents for the arbitrator to consider. Ultimately, however, the final decision on the case is in the hands of the arbitrator. These decisions usually cannot be challenged except on very limited grounds.
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